Tencent Music Entertainment ( TME ) shares rose Tuesday after the company posted second-quarter results that topped expectations.

Revenue came in at $1.18 billion, up 17.9% year-over-year(Y/Y) , driven by robust growth in online music services. This strength was partly offset by lower revenue from social entertainment services and other segments. Analysts had projected $1.10 billion.

China's online music and audio entertainment platform's adjusted EPADS of 23 cents (1.66 Chinese yuan) topped the analyst consensus estimate of 19 cents.

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Revenues from music subscriptions were $611 million, representing 17.1% Y/Y growth.

Monthly active users (MAUs) for online music declined by 3.2% Y/Y to 553 million. Paying users for online music grew by 6.3% Y/Y to 124.4 million. The monthly average revenue per user (ARPPU) for online music grew by 9.3% Y/Y to 11.7 million Chinese yuan.

Gross margin increased to 44.4% from 42.0%, primarily due to strong growth in revenues from music subscriptions and advertising services, and the decline in revenue sharing ratio of social entertainment services.

Adjusted net profit was $369 million, up by 33% Y/Y. Total cash, equivalents, term deposits, and short-term investments as of June 30, 2025, were $4.87 billion.

Executive Chairman Cussion Pang said Tencent Music achieved strong year-over-year growth in both revenue and profitability in the second quarter.

He credited music subscriptions as a core growth driver and highlighted momentum across advertising, concerts, and artist merchandise.

He emphasized the company's focus on scaling its platform into a vibrant, one-stop music destination that empowers creators and strengthens connections with listeners.

CEO Ross Liang highlighted the surpassing of 15 million SVIP subscribers or Super VIP subscribers (a higher-priced premium membership) as a milestone reflecting user loyalty.

The stock gained 100% year-to-date.

Price Action: TME shares are trading higher by 4.19% to $23.65 premarket at last check Tuesday.

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